cows in field

2017, September Pay and Feed Price Update

By Ed Maltby, NODPA Executive Director

Update for September 2017averageretailvalue

Estimated sales of total conventional fluid milk products decreased 8 percent from August 2016 whereas estimated sales of total organic fluid milk products decreased slightly by only 0.2 percent from a year earlier.

USDA AMS reports total organic milk product sales for August 2017 were 218 million pounds, down from the previous August but up 0.8 percent, January-August compared with the same period of 2016. Total organic whole milk product sales for August 2017, 86 million pounds, were up 4.1 percent compared with August last year and up 7.3 percent, January-August compared with the same period of 2016.

Update for September 2017averageretail

In New England, Federal Milk Market Order 1 reports that during September 2017, organic whole milk utilization totaled 14.6 million pounds, up from 14.3 million pounds one year earlier. Organic reduced fat milk utilization for September this year, 18.6 million pounds, was down from 20.3 million pounds one year earlier. During September, there was milk added to the pool from organic plants in Ohio and Michigan.

Results of the 2016 NASS Certified Organic Survey were recently released. Comparing 2016 results with results from 2008 and 2014, the general trend is that organic dairy farms are producing more organic milk, and average dollar sales by farms have increased. Looking at each of the top 15 states, the number of organic dairy farms from 2014 to 2016 has increased except Minnesota, New Mexico and Iowa, each of which has declined. Comparing 2008 and 2016, there were declines in organic dairy farm numbers in 7 of the top 15 states: Wisconsin, Texas, Oregon, Vermont, Minnesota, New Mexico, and Iowa. However, in each of those states the average organic milk sales per farm increased from 2008 to 2016. Several states had no data on the number of cows, volume of milk or dollar sales including New Mexico and Colorado. New York has the largest number of organic dairy farms, 486, closely followed by Wisconsin with 455. Wisconsin had led the survey in farm numbers in 2008 and 2014. California has the highest organic milk sales (volumes and dollars) of any state with 106 farms averaging 473 milking cows per farm at an average pay price of $34.90 per hundred pounds.

Update for September 2017fluidmilk

The table below is from the 2016 Organic census. The data is not conclusive as the survey was not completed by all farms and of those that did not all included financial data.

Update for September 2017_paypricechart

Since 2008, sales of organic milk at retail have increased by 54% and we have no independent data on organic milk not sold as Class I Fluid milk. In projecting to the future, we need more data on which to base the future of demand and pay price. The current AMS supplied data and the Organic Census is a start but there are many gaps in the data that could be easily supplied by other departments of USDA.

Stonyfield announced in September, at Expo East, that they will be launching some string cheese products. They will not be using their New Hampshire, Londonderry plant and there are no reports of where they will be manufacturing their product and what other types of cheese they will be adding to their brand. Stonyfield has been a major utilizer of New England organic milk and providing a third buyer for the region to mitigate the power of the two national brands to control pricing. The New England and New York Agriculture departments need to encourage the company to honor its mission and continue its investment in New England.

Update for September 2017retailpricegap

With organic milk being sold into the conventional manufacturing market, especially in the West, processing plants are reaching capacity. CROPP opened its new butter plant in McMinnville, Oregon on Aug. 12th after buying the old Farmers Cooperative Creamery last year. The plant is the co-op’s first brick-and-mortar facility outside of Wisconsin, and after Wisconsin, Oregon produces the next largest volume of milk in the CROPP supply chain. The plant will produce butter and skim milk powder, but in the future could expand to making buttermilk powder and other products. The hope is that this extra processing capacity will tighten the market and allow CROPP to balance their supply more easily.

Organic feed grade corn demand is good although the price reported by USDA AMS is only slightly higher. Delays in harvest, high moisture tests for new crop corn and the restriction on imported supplies as a result of NOP’s stricter controls had increased demand for organic corn until the new crop arrived. Organic feed grade soybean demand and activity is very light, trading 20 cents higher f.o.b. Organic soybean meal and oil trading is too limited to trend, but slightly firmer undertones are noted.

Update for September 2017organiccorn

Update for September 2017organicsoybean